Union, City Sew Tentative Deal on Garment District Future

While the city says the new formula has yet to be worked out, city officials presented fashion industry and real estate executives with a plan that called for a 1:6 ratio of preserved production space to converted office space, and a market by which landlords could buy and sell preservation credits. For instance, a landlord that agrees to preserve in fashion production a building of 100,000 square feet could sell 600,000 square feet of office-space conversion rights.

The proposal presented to the fashion industry would leave about 350,000 square feet of production space. Industry groups and the city say somewhere around 800,000 square feet is being used for production, though significantly more is zoned for its use.

Many landlords think that number is agreeable, as does UNITE HERE, which initially pushed for a higher amount. Other groups involved, including the Council of Fashion Designers of America, want more production space.

Some area landlords and the Fashion Center Business Improvement District also have concerns over how the mechanism to buy and sell the preservation rights will exist and be funded, and are resistant to plans that would place too much burden on property owners.

Ultimately, the plan will need the assent of Council Speaker Christine Quinn, who represents the area, as the rezoning needs Council approval.

Ms. Quinn’s deputy chief of staff, Maura Keaney, said in a statement that the garment district is an “important economic engine we need to protect and even grow,” though she did not speak to the specifics of the rezoning. “We can protect these jobs, while also letting this neighborhood change with the market.”

Still, the deal with UNITE HERE seems to make such an approval easier given the union’s pull within the Council.

While there is no direct connection between the fashion production industry and hotels, the union, representing the workers of both trades, believes a rezoned garment district would be highly attractive to hotels, and therefore wants a larger public process—with a vote before the Council—for hotel development. Such a mechanism is without precedent in the city, as hotels are currently permitted to rise in many manufacturing and commercially zoned areas.

“The preservation of manufacturing space in the garment center is a critical part of any future rezoning. In our discussions with the Bloomberg administration, that has been our priority goal,” UNITE HERE’s political director, Neal Kwatra, said in a statement. “However, given the likelihood of future hotel development in a dynamic, rezoned garment center, we thought it was vital to ensure that garment workers and other stakeholders have a voice in how that development unfolds.”

For months, the union has been pushing the city to require special permits for new hotels citywide, and initially offered resistance to the administration’s plan to redevelop Willets Point in Queens in hopes of a broad agreement. That push failed, though the union won that concession at the garment district; and also the city agreed to require special permits for hotels in a number of specific industrial-focused sites known as industrial business zones.

The deal over the garment district hotel permits is not welcome news to the real estate industry’s main advocacy arm, the Real Estate Board of New York, though REBNY’s president, Steven Spinola, said he will not oppose it.

“We think it’s a mistake, but my members that are affected in the garment center have basically accepted the concept, so we are not going to scream or yell about it,” Mr. Spinola said. “We think it’s important to get rid of this ancient, obsolete and ineffective zoning restriction.”